Oil Hits $100 as Iran Tensions Escalate — Why Bitcoin and Altcoins Are Falling

Bitcoin and the wider crypto market moved sharply lower on Thursday as escalating tensions between the United States and Iran pushed oil above $100 per barrel. The renewed geopolitical uncertainty erased part of this week’s crypto recovery and returned inflation and interest-rate concerns to the center of the market.

Bitcoin fell below $65,000 after recently approaching $67,000. Ethereum slipped under $1,900, while XRP, Solana, Dogecoin and Cardano recorded even larger daily losses.

The immediate question is whether this is a temporary reaction to breaking news or the beginning of another significant crypto correction.

Why Did Oil Rise Above $100?

Brent crude jumped approximately 7% to more than $100 per barrel, reaching its highest level in nearly two months. West Texas Intermediate also moved above $90.

The surge followed attacks by Iran-aligned Houthi forces on two Saudi oil tankers in the Red Sea. The group also threatened to disrupt Saudi oil shipments through the Bab el-Mandeb Strait, one of the world’s most important maritime trade routes.

These attacks are particularly concerning because shipping through the Strait of Hormuz has already been severely disrupted. If both the Strait of Hormuz and the Red Sea become increasingly dangerous for tankers, a substantial share of global energy supplies could face delays or complete interruption.

US President Donald Trump subsequently promised significant military punishment against Iran and its regional allies, raising concerns that the conflict could expand further.

Goldman Sachs analysts have warned that Brent crude could rise above $120 if the supply disruption continues.

Why Is Bitcoin Falling When Oil Rises?

Bitcoin does not depend directly on oil, but a major energy shock can affect nearly every risk asset.

Higher oil prices increase transportation, manufacturing and electricity costs. Businesses frequently pass those costs on to consumers, creating another source of inflation.

If inflation starts accelerating again, the Federal Reserve may be unable to reduce interest rates. It could even consider additional rate increases if price pressures become severe enough.

That possibility is already entering market expectations. Following oil’s surge, traders reportedly began assigning an almost 40% probability to a Federal Reserve rate hike at its next meeting. Only a few days earlier, the probability had been in the single digits.

Higher rates generally hurt Bitcoin, technology stocks and other speculative investments. Investors can earn more from government bonds while taking considerably less risk, reducing the appeal of non-yielding assets.

Crypto Market Turns Red

Bitcoin was trading around $64,700 after falling roughly 2% over 24 hours. The decline followed its rejection near the important $67,000 resistance level.

Ethereum dropped close to 3% to approximately $1,888, losing the psychologically important $1,900 level. The damage was more pronounced among several major altcoins:

• XRP declined approximately 3.8%.
• Solana fell around 3%.
• Dogecoin lost nearly 5%.
• Cardano dropped more than 5.5%.
• Stellar declined approximately 4.5%.

Hyperliquid, Zcash and Monero were among the few major cryptocurrencies remaining positive during the same period.

The performance suggests investors are reducing exposure to higher-risk altcoins first. This is typical during periods of geopolitical uncertainty, when liquidity moves toward cash, government bonds and other defensive assets.

Bitcoin’s Safe-Haven Narrative Faces Another Test

Bitcoin is frequently presented as digital gold and a hedge against political instability. However, its reaction to the latest Iran escalation tells a more complicated story.

Instead of rising alongside geopolitical risk, Bitcoin declined with stocks. This suggests that traders are still treating BTC primarily as a risk asset, especially when an international crisis threatens inflation and monetary policy.

Bitcoin may benefit from currency debasement and long-term concerns about government debt. In the short term, however, sudden market shocks often lead investors to sell liquid assets to reduce risk or cover losses elsewhere.

This does not necessarily invalidate Bitcoin’s long-term safe-haven argument. It does show that Bitcoin can behave very differently from gold during the initial stage of a crisis.

Can Bitcoin Recover?

The $64,000 to $65,000 area is now the first important zone to watch. If Bitcoin stabilizes above this region, the decline could remain a normal correction following its 13% recovery from July’s lows.

A rebound would need to push BTC back above $67,000. Breaking that resistance could reopen the path toward $70,000 and then the 200-day moving average near $72,800.

The bearish scenario would begin with a decisive loss of $64,000. That could expose the recent support zones around $62,000 and $60,000. Altcoins would likely experience proportionally larger losses if Bitcoin moves toward those levels.

The next move will depend heavily on developments in the Middle East. Any indication of de-escalation or restored shipping routes could pull oil lower and help crypto recover. Additional attacks on tankers, energy facilities or strategic waterways could push oil higher and extend the risk-off move.

Is Another Crypto Crash Coming?

The current decline is not yet large enough to confirm a new crypto crash. Bitcoin remains above its recent lows, and the market has not experienced the type of widespread liquidation cascade normally associated with a major breakdown.

However, the combination of $100 oil, rising bond yields, renewed rate-hike expectations and escalating military action creates a dangerous environment for speculative assets.

Crypto investors should therefore watch oil alongside Bitcoin. As long as Brent remains above $100 and the conflict continues expanding, BTC may struggle to regain $67,000—even if ETF demand and regulatory developments remain supportive.

For now, geopolitical risk has taken control of the market, and Bitcoin’s next major move may be decided outside the crypto industry.